MegaFon makes $1.06 bln early payment for Yota
MOSCOW. June 25 (Interfax) - Russian "big three" mobile operator MegaFon has paid $1.06 billion ahead of schedule to its shareholder, Garsdale, for acquisition of Scartel/Yota.
MegaFon shareholders approved the supplementary agreement on the early payment at an EGM on June 5. The agreement was signed with Garsdale on June 6.
MegaFon acquired 100% of shares in Maxiten Ltd, which owns Scartel, on October 1, 2013 for $1.18 billion, which was to be paid on October 1, 2014 and October 1, 2015 in equal tranches, plus 6% interest accrued from the closing date.
The early payment was prompted by the large amount of cash MegaFon was able to amass thanks to outstanding operating results and a successful issue of ruble bonds, CEO Ivan Tavrin is cited in a statement issued earlier in June as saying.
The payment significantly reduces the company's dollar-denominated liabilities and its exposure to fluctuations on the currency market, Tavrin said.
MegaFon posted a loss of 4.9 billion rubles in the first quarter of 2014. "None of the exchange rate charges resulted in any cash losses: 100% of the loss is due to a revaluation of foreign currency liabilities on paper," CFO Gevork Vermishyan said.
Net debt declined to 91.4 billion rubles as of March 31, down from 103.2 billion rubles at the end of 2013.Net debt/OIBDA declined to 0.69 from 0.81.
As of the end of 2013, 78% of debt was denominated in rubles, 18% in dollars and 4% in euro. MegaFon's option to acquire 25% in retailer Euroset from the leading shareholder, Alisher Usmanov-controlled Garsdale, was also denominated in dollars, at $535 million plus 8% annual interest.